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Someone who is paying $10 for 5 stickers is not doing it for the stickers. They are
doing it for the hopeful chance that it suceeds. As they are basically doing a donation
there should be no problem with the "low stakes for high odds". For the 10% off retail
then it better be an amazing product ("good return") or a high chance of success otherwise
you need more than a 10% discount to account for the risk.

And yet a hell of a lot of projects offer *no* discount, particularly ones involving hardware, and people continue to back them.

And FYI, Kickstarter is not a donation platform as evidenced by the dozens of angry posts about "we want full refund."

Actually it is. The people demanding a full refund either don't know that (because they didn't bother to read) or they DO know that but choose to act as if they don't.

Actually, it's not. Legally, you're buying the promised rewards. If you order a book from a mail-order company, they have a duty to either deliver or provide a refund... unless they go bankrupt. Same with Kickstarter projects -- see the Ts&Cs

When a project is successfully funded, the creator must complete the project and fulfill each reward. Once a creator has done so, they’ve satisfied their obligation to their backers.

[kickstarter's emphasis]

That's pretty unequivocal -- there's a legal contract between Triggertrap and the backers to supply the promised product. 20% refund just doesn't cut it -- if they can't build the Ada, they're going to have to return 100%.

Sometimes, it's just plain good to kickstart something even if it looks unlikely they will reach the goal. I would argue that is what happened in this case, because they found out a LOT about making this thing a lot of people want, and are sharing what they found. Eventually the thing people really wanted may well get made. If I had contributed to this Kickstarter (I did not) I wouldn't be mad, just a bit sad it didn't go through.

What they "found", you say, as though it's all over. As microfunding is illegal as investment in the US, Kickstarter projects are contracts of sale under US law. Under the Ts & Cs of the site, it is made clear that the project owners have a duty to deliver the promised rewards. With T-shirts and stickers, that's trivially easy -- with a product that was largely theoretical at the time of project launch, not so much.

Triggertrap have set themselves up for potential class action from the Kickstarter backers -- from TFA:

And so we only have one option left: Refund the remainder of the money we raised from Kickstarter to our Kickstarter backers, and double down on Triggertrap Mobile.

So they're returning what's left of the Kickstarter pot, but no, that's not their only option -- it's not even a legal option. Once you get funded via a Kickstarter project, you have to honour the contract, and there are three ways that can pan out: 1) you deliver the product; 2) you refund 100% of the money; 3) the customer accepts your offer of an alternative product of equal or greater value. If you cannot honour the contract, there's only one remedy: insolvency.

It is clear from the article that Triggertrap is a single company, and that Ada was a project carried out by Triggertrap -- as can be seen in this passage:

But Triggertrap is a going concern; We have hundreds of thousands of customers around the world, and more than a million photographs are taken with Triggertrap’s Mobile products every month. If we commit to delivering Triggertrap Ada, there’s an extremely good chance that the company won’t survive. If that happens, we don’t just let down our Kickstarter backers; We also let down the six-figure number of customers we have around the world, the Triggertrap staff lose their jobs, and it all grinds to a halt. That simply cannot happen on my watch.

If Triggertrap Ada had been set up as a separate LLC, a wholly-owned subsidiary of Triggertrap, they would be able to declare the subsidiary insolvent and the liability would be lost as the company folded, and debts would be written off. However, as long as Triggertrap continues to trade, the liabilities persist, and paying back 20% isn't going to cut it with the buyers.

I could make a political point about how kickstarter and its kin are a response to laws that limit risky investments by all except the wealthy and the effect of "the closure" in Venice in the 14th centuary.

You could, but then you'd be ignoring history. The US "informed investor" legislation is to protect people from otherwise-legal fraud. Did you never hear about the movie scam? A production team would roll up in a small town, and offer to put the place on the map by shooting a move there. Everyone knows movies make millions. No brainer. Invest, invest, invest! And so the townsfolk would hand over many thousands of pounds to the production company, who would shoot a movie -- a crap one that no-one would ever pay money to see. Contract complete, the production crew would take their salaries and send the film off to distributors, who would refuse it. The townsfolk would never see any of their investment returned, and the production crew would be better off. Done right, they'd also get catering and accommodation on credit to the production company, but make sure that they emptied the account through executive salaries and equipment hire (from themselves) so that they could fold the company with massive debts.

By sticking everything in limited liability companies, this type of scam remains on the legal side of the law. In fact, even major productions companies often start a new LLC for each production, and if they cancel the project, extras, cleaners etc go unpaid.

So yes, before you assume everything your government does is designed to screw you over, take a look at your own history.

This should be the approach taken for any risky venture on kickstarter as well.
Assume that you might lose all your money.

Unfortunately the approach for venture capital is "high stakes on good odds" -- you might lose a million, but you might make a hundred million. With Kickstarter, you might get 10% off the projected retail price, or you might even pay full price. Or you might even pay $10 and only get 5 bloody stickers. You can't Kickstart like a capital investor, because the gains aren't there for the funders.

(after you properly defined the problem, and the solution you want to work towards).

That's a bit circular though, because my difficulty is properly defining the problem, or rather the set of all subproblems, and the solution(s). It's easy to implement once you know what you're doing, but if we all knew what we were doing, there'd be much less buggy software out there....

If you can't express the idea in text and text alone, then you haven't broken it down properly.

...and at the planning stage, you are still trying to break down the problem. The core concept behind team thinking is that individually, we often fail to analyse the situation completely, and input from others can show holes in our reasoning and things we've failed to properly consider. The whole, hopefully, is greater than the sum of its parts.

I'm coding alone at the moment, and because I have no-one to bounce ideas off, I frequently find myself heading into dead-ends because the problem domain I'm dealing with is very large, and as there's no-one to discuss things with, I need to prototype to find my mistakes. Then I have to go back and rewrite.

That's the key phrase -- don't reinvent the wheel. But is coding "inventing" or "building"? Because sometimes it's quicker to build your own wheel or whittle your own peg than go out and hunt down one the right size for your needs.